The Fed's interest rate decisions have a profound impact on the Bitcoin market. When the Fed chooses to cut interest rates, it generally creates favorable conditions for Bitcoin. A rate cut weakens the appeal of the dollar while releasing more liquidity and increasing the market's risk appetite. If the rate cut is preventive and inflation is confirmed to be temporary and controllable, this proactive easing policy will directly benefit Bitcoin. However, if the rate cut is due to economic recession pressures, it may adversely affect Bitcoin in the short term, as rising risk aversion may lead funds to flow into the dollar or U.S. Treasury bonds, but in the long run, it remains beneficial as more liquidity will eventually be injected into the market.

On the contrary, if the Fed maintains interest rates, it may have a negative impact on Bitcoin in the short term. Persistently high interest rates will increase the cost of capital, tighten liquidity, and strengthen the dollar. In this environment, risk assets face pressure, and Bitcoin may be at risk of short-term decline. However, if high interest rates persist long-term and lead to an economic recession, the market may bet on larger interest rate cuts in the future, which could actually support Bitcoin prices in the medium to long term.

It is worth noting that interest rate cuts are favourable for Bitcoin in the long run, but if the market has already priced in this information or if the rate cut is in line with or lower than expectations, a short-term "Favourable Information exhaustion" effect may occur, leading to a price pullback. The core factor that truly drives the medium to long-term rise of Bitcoin is the continuous release of Liquidity, rather than just this single event of an interest rate cut.

Therefore, when investors pay attention to changes in Fed policies, they need to comprehensively consider market expectations, economic fundamentals, and long-term liquidity trends, rather than overly focusing on a single interest rate cut decision. Bitcoin, as an emerging digital asset, is influenced not only by traditional financial policies but also closely related to its own technological development, adoption rate, and regulatory environment. In a complex and ever-changing market environment, maintaining a clear analytical perspective and a long-term investment mindset is crucial.